If you’re an eligible shareholder of Commonwealth Bank of Australia (ASX: CBA), then later today you should be receiving the banking giant’s fully franked 98 cents per share final dividend.

While I suspect that a good portion of shareholders will be using these funds as a source of income, there may be some which wish to reinvest these dividends back into the share market.

If you’re part of the latter group, then here’s where I think you should consider investing these funds:

Accent Group Ltd (ASX: AX1)

If you’re looking to turn these dividends into even more dividends, then you might want to take a look at Accent Group. It is a footwear-focused retail group which owns store brands such as HYPE DC and Platypus. It has been growing its earnings and dividends at a solid rate over the last few years. Pleasingly, this even continued during the pandemic thanks to the popularity of its brands, its strong market position, and particularly its growing online business.

I’m confident there will be more of the same over the coming years, especially given its expansion plans. In FY 2021 I’m expecting Accent to pay a 9 cents per share fully franked dividend. Based on the current Accent share price, this means investors will receive a generous 5.4% dividend yield.

Altium Limited (ASX: ALU)

Altium is a leading electronic design software company best-known for its eponymous Altium Designer product. This software allows engineers to design the complex printed circuit boards that are found in almost all electronic devices.

Demand for its software is expected to rise strongly in the coming years thanks to the rapidly growing Internet of Things and artificial intelligence markets. This is because these two markets are underpinning the proliferation of electronic devices globally. Management appears confident in its growth trajectory. It is aiming to grow its revenue to US$500 million by 2025-2026. This will be an increase of over 150% from the revenue of US$189 million it achieved in FY 2020.

More reading

• The ASX big bank stock that’s most at risk of a dividend cut
• BrainChip (ASX:BRN) and Novonix (NVX) were among the most traded shares on the ASX last week
• 3 ASX dividend shares to buy for income today
• Here are the 10 most popular ETFs on the ASX
• ASX 200 Weekly Wrap: Bank shares push ASX 200 higher

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia has recommended Accent Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Full Federal Court has handed Woolworths Group Ltd (ASX: WOW) a win against the Australian Competition and Consumer Commission (ACCC).

The consumer watchdog started legal action two years ago alleging that the supermarket was misleading customers. The accusation involved a range of house-brand disposable cutlery, plates and bowls that were labelled “biodegradable and compostable”.

The ACCC lost the original Federal Court case last year but immediately appealed.

But the Full Federal Court’s dismissal of the appeal on Tuesday gives Woolworths a decisive victory.

The ACCC had argued that labelling the W Select Eco products with environmentally friendly words like “biodegradable and compostable” without supporting evidence should not be allowed.

“We appealed this case because we believe that businesses should be able to support claims they make about their products, especially when consumers are likely to pay more for the product because of the claims made,” said ACCC Chair, Rod Sims.

“Consumers may select products based on the claims made by the seller or manufacturer, and should be able to rely on environmental claims made by businesses about their products.”

A Woolworths spokesperson told The Motley Fool that the company was pleased with the court’s decision.

“We treat our obligations under the Australian Consumer Law very seriously, and understand how important it is that our customers can trust the environmental claims we make.”

How did Woolworths win?

The ACCC’s case was that the offending words gave the impression to customers that the picnic crockery would rot in “a reasonable time” in compost or landfill.

Australian Consumer Law dictates that product claims about “future matters” are misleading unless the merchant has “reasonable grounds”.

The judge, however, found that Woolworths’ claims were not about future characteristics but “biodegradable and compostable” described the items’ inherent state.

The appeal hearing found that the supermarket never represented the W Select Eco products would decompose within a certain amount of time.

The disposable plates are made of waste products extracted from sugarcane. The cutlery consists mostly of chemicals derived from corn starch.

The Motley Fool understands “independent certification” was published in 2014 when the range was launched.

The Woolworths share price was down 0.53% on Tuesday, to close the day at $37.32.

More reading

• ASX 200 Weekly Wrap: Bank shares push ASX 200 higher
• Is the Coles (ASX:COL) share price a buy after renewable energy deal?
• Afterpay (ASX:APT) one of top 10 lockdown winners
• Openpay (ASX:OPY) share price pushes higher on business update
• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Woolworths Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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With interest rates at record lows and potentially going even lower in the near term, it certainly is a tough environment for income investors.

Fortunately for them, the share market is home to a large number of companies offering attractive dividend yields.

Two top ASX dividend shares that I think would be great options right now are listed below. Here’s why I would buy them:

Bravura Solutions Ltd (ASX: BVS)

I think Bravura Solutions would be a great option for income investors. Bravura is a leading provider of software products and services to the wealth management and funds administration industries. It has a number of products in its arsenal such as the Rufus transfer agency solution and the Midwinter financial planning solution.

However, the key product for me is the Sonata wealth management platform. It has a massive market opportunity and looks well-placed to underpin Bravura’s growth in the coming years once the pandemic passes. For now, I estimate that it will pay shareholders an 11.5 cents per share dividend in FY 2021. Based on the current Bravura share price, this equates to a 3.2% dividend yield.

National Storage REIT (ASX: NSR)

A second dividend share to consider buying is National Storage. I think the self-storage operator could be a good option for income investors due to its strong market position and positive long term outlook thanks to its organic and inorganic growth opportunities. 

And while the company’s earnings are likely to be flat at best in FY 2021 because of the pandemic, I’m confident that it will return to growth once it passes. Especially given predictions for house prices to rise strongly next year. This could lead to higher housing sales activity and increasing demand for its centres. For now, based on the current National Storage share price, I estimate that it offers investors a forward 4.1% dividend yield.

More reading

• 2 top ASX dividend shares for income investors to buy today
• Why I would buy Commonwealth Bank (ASX:CBA) and this ASX dividend share
• 3 of the best ASX growth shares you can buy right now
• Why I would buy Altium (ASX:ALU) and these ASX growth shares
• 3 mid cap ASX shares to buy for strong potential returns

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Tuesday the S&P/ASX 200 Index (ASX: XJO) had a subdued day and edged ever so slightly lower. The benchmark index ended the day 0.2 points lower at 5,952.1 points.

Will the market be able to bounce back from this on Wednesday? Here are five things to watch:

ASX 200 expected to tumble.

It looks set to be a tough day of trade for the ASX 200 on Wednesday. According to the latest SPI futures, the ASX 200 is poised to open the day 52 points or 0.9% lower this morning. This follows declines on Wall Street which ended a three-day winning streak. The Dow Jones fell 0.5%, the S&P 500 dropped 0.5%, and the Nasdaq edged 0.3% lower.

Corporate Travel Management to return.

The Corporate Travel Management Ltd (ASX: CTD) share price will be on watch today when it returns from its trading halt. The corporate travel company requested the halt on Monday whilst it undertook a $375 million capital raising. These funds will be used to acquire Travel & Transport for $274.5 million. Travel & Transport is a leading US travel management company. Management is forecasting the acquisition to be approximately 30% earnings per share accretive post-synergies.

Oil prices sink lower

Energy shares such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could come under pressure on Wednesday after oil prices sank lower. According to Bloomberg, the WTI crude oil price dropped 3.9% to US$39.03 a barrel and the Brent crude oil price has fallen 3.8% to US$40.84 a barrel. Concerns over rising coronavirus cases weighed on sentiment.

Gold price continues its ascent.

Gold miners such as Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could be on the rise today after the gold price continued its recovery. According to CNBC, the spot gold price is up 1.05% to US$1,902.10 an ounce. This follows the further softening of the U.S. dollar and stimulus optimism.

ASX annual general meeting.

The ASX Ltd (ASX: ASX) share price could be on the move on Wednesday. Later today the stock exchange operator will be holding its virtual annual general meeting. The company could also release a trading update ahead of the meeting.

More reading

• 2 must-buy ASX 200 shares I rate highly
• 3 ways to protect your ASX share portfolio in a market crash
• The ASX big bank stock that’s most at risk of a dividend cut
• ASX 200 ends the day flat, BOQ (ASX:BOQ) shares drop on impairments
• The forgotten ASX gold stock that UBS is urging you to buy today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) and All Ordinaries Index (ASX: XAO) have seen a significant improvement recently following a series of challenging sessions this month. With the United States tech sell off largely behind us, October could be shaping up as an opportunistic month for ASX tech shares. 

2 ASX tech shares to watch in October

1. Selfwealth Ltd (ASX: SWF) 

Selfwealth is Australia’s first peer-to-peer investing platform with a simple, flat-fee brokerage fee. The company charges $9.50 per trade on the ASX regardless of position size. Its unique product and quality customer service has seen revenues soar 313% to $8.6 million in FY20 with a 235% increase in active traders to 46,445 and an improved cash burn of $147,000 down from $3.4 million in FY19. The company has seen a sharp increase in active traders through the pandemic and sees itself as a young brand developing into one of Australia’s most trusted investment platforms. 

Selfwealth will launch US trading in the December quarter. The US market is the most popular international market with Australian investors and the company intends to maintain its highly-competitive fee structure. I believe the announcement and commencement of US trading could be the catalyst to take the Selfwealth share price to the next level. While Selfwealth is a smaller company relative to most household ASX tech shares, it could become a leader in the investing space.  

2. Tyro Payments Ltd (ASX: TYR) 

EFTPOs provider Tyro Payments has had a challenging year amidst COVID-19. Its FY20 results highlight a 15% increase in transaction value to $20.1 billion, 11% increase in merchants to 32,176 and 11% increase in total revenue to $210.7 million. It finished FY20 with an earnings before interest, taxes, depreciation and amortisation (EBITDA) loss of $4.4 million compared to the $8.6 million loss in FY19. The company maintains a strong liquidity position of $188.3 million in cash. 

Tyro has expanded its product offerings to include e-commerce transactions, telehealth transactions such as Medicare benefits and Alipay. Tyro is also involved in banking operations providing SMEs cash advances, deposit accounts and term deposit facilities. Its banking operations saw a 38.1% increase in revenue to $1.8 million and gross profits of $1.3 million.  

Tyro has been providing the market with weekly transaction value updates to provide transparency as to the impact of COVID-19. I believe the anticipated relaxation of lockdown measures in Victoria and reopening of borders could see a significant improvement in Tyro’s transaction volumes. The company’s strong cash position, product verticals and anticipated transaction volume recovery could be a catalyst for a strong share price performance moving into October. I believe the Tyro share price deserves a place on any ASX tech share watchlist. 

More reading

• What you need to know about Tyro’s share price roller coaster today
• 3 ASX shares for beginners to buy
• A definitive guide to September ASX share trends
• This ASX tech share is still cheap to buy
• 3 small cap ASX growth shares I’d buy with $1,000

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Tyro Payments. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The benchmark S&P/ASX 200 Index (ASX: XJO) is home to a number of high quality shares for investors to choose from.

But with such a diverse range of shares available to investors, it can be difficult to decide which to invest your hard-earned money into.

Well, two ASX 200 shares which I think are must buys are listed below. Here’s why I rate them highly:

Afterpay Ltd (ASX: APT)

The first ASX 200 share I think is a must-buy is Afterpay. Although it is certainly a high risk option (and therefore not suitable for all investors), I believe the potential returns on offer over the long term make it a great buy and hold option. This is due to its international expansion and leading position in a buy now pay later industry growing rapidly thanks to the increasing popularity of the payment method with both consumers and retailers. 

In respect to its international expansion, Afterpay has recently launched in Canada and acquired its way onto mainland Europe. But it isn’t stopping there. Thanks partly to its relationship with WeChat owner, Tencent Holdings, the company has its eyes on entering the Asia market. Combined with its $5 trillion opportunity in the United States, I believe Afterpay has the potential to become a giant of the payments industry in the future.

ResMed Inc. (ASX: RMD)

Another ASX 200 share that I think is a must buy is ResMed. Thanks to the growing popularity of its masks and software solutions, it has been growing at a very strong rate over the last decade. Pleasingly, the company has started the new decade just as strongly as it finished the last. In FY 2020 it delivered a 15% constant currency increase in revenue to US$2,957 million and a 32% jump in net income to US$692.8 million.

Looking ahead, I believe it is well-placed to continue this strong form for some time to come. This is due to its world-class products and the massive number of undiagnosed sleep apnoea sufferers globally. Another big positive, which is often overlooked, is its rapidly growing digital health ecosystem. At the end of FY 2020 it had over 12 million cloud connectable medical devices. This provides ResMed with strong recurring revenues and an invaluable amount of high quality data.

More reading

• 3 ways to protect your ASX share portfolio in a market crash
• The ASX big bank stock that’s most at risk of a dividend cut
• ASX 200 ends the day flat, BOQ (ASX:BOQ) shares drop on impairments
• The forgotten ASX gold stock that UBS is urging you to buy today
• Leading brokers name 3 ASX shares to sell today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended ResMed Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) has been in a bit of a funk lately. Between 19 August and 22 September, ASX 200 shares lost more than 6% of their value. Although the index has now recovered around 3% since the ‘dip’ bottomed out last week at 5,784 points, these wobbles were enough to have some ASX investors nervous. What if the market does what it did back in March again?

Well, unfortunately, I have no easy answers as to whether there will indeed be another market crash in 2020 — no one does. But what I do know is that if an investor is worried about an imminent crash, there are certain steps one can take to protect a share portfolio if such a thing comes to pass.

3 ways to protect an ASX share portfolio in a market crash

Hoard cash

Cash is the ultimate defence against a market crash. While cash makes a lousy long-term investment (especially in today’s low interest rate environment), it is also an investor’s best friend in a share market crash. Not only does cash keep its value and liquidity in any market condition, you can also use it in a crash to buy ASX shares at cheaper prices. I don’t ever ‘switch’ my entire portfolio to cash or vice-versa. But I do like to keep a varying percentage in cash at all times, depending on market conditions. If you’re worried about a crash, increasing your cash position is one of the easiest ways to build a buffer.

Own strong ASX dividend-paying shares

One of the best things about a strong ASX dividend-paying share is the relative certainty of the income you’re receiving. 2020 and the pandemic has made it especially hard for former dividend-heavyweights to keep the divideds coming this year. But they are out there. And receiving income during a market crash can be a great way of buffering your portfolio against paper losses, as well as giving you some cash to spend on cheap shares.

Hedge with ETFs

Exchange-traded funds (ETFs) are another way you can protect your portfolio against a market crash. Some ETFs are specifically designed for this purpose. The BetaShares Australian Equities Bear Hedge (ASX: BEAR) is one such example. It’s designed (according to BetaShares) so that a “1% fall in the Australian sharemarket on a given day can generally be expected to deliver a 0.9% to 1.1% increase in the value of the fund (and vice versa)”. There are other options too. Many investors like to hedge against a market rash with gold, either bullion, gold miners or gold ETFs like the ETFS Metal Securities Australia Ltd (ASX: GOLD).

These are both legitimate instruments to use, but I wouldn’t recommend them for a beginner investor, as they can be quite complex to manage effectively.

Foolish takeaway

Although many investors would love to protect their share portfolios in a market crash, the unfortunate reality is that (like any insurance), protecting your portfolio usually costs you money if the market crash doesn’t eventuate. Cash doesn’t fall in value when the share market crashes, but it also doesn’t rise when the markets do. And gold and inverse ETFs can fall in value if the markets rise. Remember, market crashes are part of the deal when it comes to investing. And they don’t last forever.

More reading

• 2 must-buy ASX 200 shares I rate highly
• The ASX big bank stock that’s most at risk of a dividend cut
• ASX 200 ends the day flat, BOQ (ASX:BOQ) shares drop on impairments
• The forgotten ASX gold stock that UBS is urging you to buy today
• One ASX tech share to buy today ahead of government cash splash

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) may have closed lower today, however three ASX shares have made new, all-time highs.

An all-time high (ATH) is when the share price hits a value higher than it has ever traded at before. Why is this significant? Many companies struggle to break previous highs for a number of reasons. Whether it’s valuations, ratios, broker ratings or even just basic seller psychology, a company approaching its ATH can be a nervous time for investors.

Companies that break past this barrier and make new ATHs are a little bit special. They have broken the glass ceiling and are off and running. When this occurs, the feeling of huge potential is often renewed for investors. Today, three ASX shares have done just this. 

ASX shares making new all time highs

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster is an e-commerce platform providing a premium shopping experience. The company specialises in furniture and homewares products and is considered to be Australia’s largest online homewares store. Large is right. Temple & Webster has over 130,000 products listed. 

The company actually operates two different brands – Temple & Webster and Milan Direct. Milan Direct specialises in furniture sourcing with many of its products listed on the Temple & Webster marketplace.

Temple & Webster has an excellent reputation in Australia and has even won several awards to prove it. These include the Deloitte Fast50, BRW Fast Starters and Power Retail awards, to name a few.

The Temple & Webster share price hit a high of $4.37 in February this year, before coronavirus caused a landslide and sent it down to a low of $1.52. Since then, the company has not only recovered, but thrived. Its share price has risen a staggering 690% since those March lows to hit an all time high today of $12.10. 

The company has been in prime position to take advantage of the wave of online shopping occurring during the pandemic, recording a 74% increase in revenue in FY2020. These strong results have helped to push the Temple & Webster share price to lofty new heights.

Sealink Travel Group Ltd (ASX: SLK)

Sealink is Australia’s largest integrated land and marine, tourism and public transport provider. It has established operations across Australia, London and Singapore.

The company boasts amazing numbers, including moving more than 280 million customers each year. That’s right, million. It’s impressive. Sealink achieves this using its fleet of over 3,500 buses and 80 ferries. Chances are, if you’ve travelled at all, you’ve travelled with Sealink!

You would think a company in this sector might have reported a bad year in 2020, all things considered. However, Sealink reported strong numbers in the form of a total revenue increase of 152.8% on the previous year. These are really incredible numbers in the face of the coronavirus pandemic.

For quite some time, the Sealink share price has traded at a maximum price of $5.23. In March, the company was also hit hard by the market crash, with its share price falling from $4.50 down to $2.50. Since then, it has well and truly recovered, climbing nearly 125% to close at $5.59 today. Not only has the rally been great for investors, but Sealink can now boast a new all-time high share price of $5.79 reached in intraday trade too.

Data#3 Limited (ASX: DTL)

Data#3 is a leading provider of IT services and solutions in Australia. Its product suite is extensive, ranging from cloud computing, security and analytics to procurement and project management services. 

The company has actually been listed on the ASX since 1997 and has over 40 years’ experience in business. Revenue is substantial for this IT player, with it reporting a whopping $1.6 billion revenue in FY2020. Revenue alone doesn’t mean much, but in the case of Data#3, this year it reported a 14.9% lift in revenue on the previous year and even more importantly, a lift of 30.5% in net profit. Great results all round.

Since the March crash, which took the Data#3 share price as low as $2.50, it stormed as high as $6.78 today before closing the session at $6.75. Again, like the other ASX shares on the list, this is a new all-time high for the company. One thing to note about Data#3, it actually made a new all-time high recently on 3 September and it has taken the company less than 30 days to do it again!

Foolish takeaway

Watching ASX shares making all-time highs is exciting because they are breaking through a barrier that has never before been broken. 

Often this can trigger a new bullish run for a company as investors develop a new wave of confidence surrounding just how far the share price could ultimately go.

More reading

• Why these ASX tech shares just hit record highs
• Why the Data#3 (ASX:DTL) share price just stormed to a record high
• 4 unstoppable ASX shares to buy with $4,000
• Why Mineral Resources, Redbubble, Saracen, & Temple & Webster shares are pushing higher
• Is the Redbubble (ASX:RBL) share price on a path to $10.75?

glennleese has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re busy constructing a retirement portfolio and looking for some quality options to add to it, I would recommend you take a closer look at the ASX shares listed below.

Here’s why I think these ASX shares would be great options for retirees:

Coles Group Ltd (ASX: COL)

The first ASX share I would add to a retirement portfolio is Coles. In fact, I believe the supermarket giant would be a great core holding for this type of portfolio. This is due to its defensive qualities, strong market position, and positive long term growth outlook. The latter is thanks to a combination of food inflation, its refreshed strategy, defensive earnings, and expansion opportunities.

Another positive is the company’s dividend policy. With Coles intending to pay out upwards of 90% of its earnings back to shareholders, they stand to benefit greatly from increasing dividends over the next decade. In the meantime, based on the current Coles share price, I estimate that it offers an attractive fully franked ~3.2% FY 2021 dividend.

Goodman Group (ASX: GMG)

Another ASX share that I think would be great for a retirement portfolio is Goodman Group. It is an integrated commercial and industrial property group that owns, develops, and manages industrial real estate across 17 countries. The main attraction to the company for me are its warehouses and logistics facilities. I believe these put Goodman in strong position to deliver consistently robust earnings growth over the next decade.

Especially given its exposure to the structural tailwinds of the ecommerce market through relationships with the likes of Amazon, DHL, and Walmart. In respect to the former, in June Goodman strengthened its relationship with Amazon with a 20-year lease for a distribution centre in Western Sydney owned by its joint venture with Brickworks Limited (ASX: BKW).

More reading

• Which ASX REITs are still worth buying in a post-COVID-19 world?
• Where to invest your Coles (ASX:COL) dividends this week
• The ASX shares that fund managers were buying this month
• 5 things to watch on the ASX 200 on Tuesday
• How to make money by investing in ASX 200 shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks. The Motley Fool Australia owns shares of COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The TPG Telecom Ltd (ASX: TPG) share price has gone off the ASX radar in the past few months, it seems. Backtrack to late June, and the imminent TPG/Vodafone merger was the talk of the ASX town. The old TPM-tickered TPG was about to join forces with Vodafone to form a newly merged telco. Investors were excited to see the fixed-line strength of TPG combined with the mobile reach of Vodafone’s customer base. The spin-off of the old TPG’s Singapore operations into Tuas Ltd (ASX: TUA) was also an exciting sidenote. In the 2 months leading up to the merger, TPM shares rose by more than 25%.

But since the merger came into effect, TPG shares have fallen off the radar. The TPG share price is down around 15% since 30 June, and the Tuas share price has offloaded more than 22%.

So what’s going on? Is this a case of buyers’ remorse?

What does the TPG share price tell us?

It’s hard to value TPG using traditional metrics like the price-to-earnings (P/E) ratio given the ‘new TPG’ has only been around for a few months now.

But let’s look at some numbers anyway. On current prices, TPG is being valued at a market capitalisation of $14.1 billion.

In its half-year earnings report which TPG released to the market recently, the company told us that if the Vodafone merger had occurred on 1 January, revenues would have come in at $2.71 billion for the 6 months ending 30 June 2020, with earnings at $918 million. If we annualise TPG’s earnings (which is a little bit shonky, I know), TPG comes in with a P/E ratio of 19.74. By comparison, rival Telstra Corporation Ltd (ASX: TLS) is currently being priced at a market capitalisation of $33.84 billion with full-year revenues of $23.71 billion and earnings of $8.9 billion, which gives Telstra a P/E ratio of 18.57.

That tells us that the market is more or less pricing these 2 companies at a similar level compared to their underlying earnings.

TPG or Telstra?

So why would an investor go for TPG over Telstra shares, for example? More growth? I happen to think Telstra’s mobile network (the only division making telcos any money these days) is far superior to the new TPG’s one and is likely to attract more customers when 5G technology comes into the mainstream.

More income? Although TPG shareholders were treated to a whopping special dividend of 51.6 cents per share on the completion of the merger, this was largely funded by debt. It is unclear what kinds of dividends the company will be paying going forward. It has got a high benchmark though — on current prices, Telstra’s reaffirmed 16 cents per share gives the company a trailing yield of 5.65% today.

Foolish takeaway

Whilst I think TPG is a great business, I would prefer to invest in Telstra myself if I wanted exposure to an ASX telecom company. There are a few things that aren’t really clear just yet for TPG, including a full-year set of numbers to analyse and any kind of dividend guidance. As such, I would go with the devil you know and stick with Telstra if you want in with this space.

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Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Is the TPG (ASX:TPG) share price a buy today? appeared first on Motley Fool Australia.

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